Australia’s biofuel industry has the potential to add more than 8000 jobs and $1 billion a year in revenue to the economy despite being neglected for more than a decade.

Queensland University of Technology economists have outlined how Australia could lift its energy security by increasing the levels of locally-produced biofuels and bioproducts. The first step was to grow our bioethanol and other biofuel industries, lead author Ian O’Hara said.

“Biofuels are the gateway to creating a bioeconomy, and biofuels production and consumption in Australia lags behind benchmark countries such as the United States and Brazil,” said Professor O’Hara, the principal research scientist at QUT’s Centre for Tropical Crops and Biocommodities.

Professor O’Hara said ethanol-blended (E10) petrol accounted for only 1.1 per cent of Australia’s total petrol sales in 2015-16. Increasing that figure to 10 per cent could create more than 8600 direct and indirect jobs, attract $1.56 billion in investment and generate more than $1.1 billion in additional revenue a year in regional areas.

The QUT study said other benefits of growing Australia’s bioeconomy included: a potential increase in farmers’ revenue from biomass-based industries to $11.4 billion a year by 2050, from $7.8 billion now; reducing carbon dioxide emissions by 8.9 million tonnes annually by increasing the use of biofuels by up to 10 per cent in both petrol and diesel; and improving the balance of trade by about $1 billion annually through substituting 10 per cent of our petrol imports with ethanol produced domestically.

Bioenergy Australia director Heather Bone said the industry in Australia had lagged other jurisdictions for a number of years, despite global consumption of biofuels as a proportion of all energy sitting at 10.4 per cent.

“Biofuels have been the forgotten renewable, it has been the ignored cousin of solar and wind,” Ms Bone told Fairfax Media. “The last 10 to 15 years, the industry in Australia has suffered from a lack of supportive policies or frameworks and risks emerged from policies that flip-flopped and moving goalposts.”

She said it could play a greater role in the current energy debate. “Biofuel should be front and centre under the National Energy Guarantee and the dispatchable energy debate as it is a renewable and dispatchable, which is unique compared to wind and solar,” Ms Bone said.

She added that Australia’s biofuel industry differed significantly from both the US and Europe’s industries and did not present a threat to food security like biofuel production in those regions.

There are currently only three commercial producers of bioethanol fuel in Australia.

The Australian Renewable Energy Agency’s (ARENA) research forecasts the global demand for biofuels to triple by 2050 and expects it to reach around $US1.13 trillion in value by 2022, with the majority of this demand to be met through ethanol.

In January, Qantas carried out the world’s first biofuel-powered flight between the US and Australia, running on about 24 tonnes of blended biofuel made from non-food mustard seed oil.

Late last year, ARENA announced $11.9 million in funding for Ethanol Technologies (Ethtec) to build a biofuel demonstration facility to commercialise their technology. The facility, in Muswellbrook in the NSW Hunter Valley, is expected to produce about 270,000 litres of biofuel annually.

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